Cheese traders took the Cheddar blocks higher for the fifth week in a row, closing Friday at $1.61 per pound, up 1 1/2-cents on the week, the highest since October and 5 cents above a year ago.

The barrels finished at $1.41, up a half-cent on the week, 6 1/2-cents below a year ago, and 20 cents below the blocks.

The blocks dropped 4 cents Monday and stayed there Tuesday at $1.57. The barrels gained 2 cents Monday and were unchanged Tuesday, holding at $1.43.

Cheese demand varies, according to Dairy Market News, but a growing segment of Midwestern cheesemakers reported a seasonal shift slower. Cheese inventory is unchanged but long.

Milk is readily available in the West and vats are at or near capacity and cheese makers are employing several strategies to control the size and type of inventory.

Butter closed Friday at $2.2875 per pound, up 2 3/4-cents on the week, the highest since Feb. 1 and 8 3/4-cents above a year ago.

Monday’s butter jumped 5 1/4-cents, then gave back 4 1/2-cents Tuesday, falling back to $2.2950.

Central plant managers continue reporting widely available cream for the churns but demand is picking up ahead of the spring holidays. Inventories are plentiful, but contacts suggest they are in a good place ahead of increasing seasonal demand.

Western churning continues at a full and fast pace. Some processors have stopped buying cream as they do not have enough capacity. Butter supplies are plentiful and stocks continue to increase but sales are generally stable, says DMN.

Spot Grade A nonfat dry milk saw a close Friday at 98 1/2-cents per pound, down 1 1/4-cents on the week but 32 1/4-cents above a year ago.

The powder inched a quarter-cent higher Monday, then lost 1 1/4-cents Tuesday, sliding to 97 1/2-cents per pound.

Dry whey saw some ups and downs last week but finished Friday at 36 cents per pound, 1 1/4-cents higher on the week, with a whopping 47 cars sold at the CME.

The whey lost three-quarters Monday and a quarter-cent Tuesday, slipping to 35 cents per pound.

GDT climbs

Technical issues delayed reporting of the March 5 Global Dairy Trade auction but once resolved the weighted average of products offered moved higher for the seventh consecutive event, jumping 3.3%.

That followed a 0.9% ascent Feb. 19 and 6.7% on Feb. 6. Sellers brought 52.8 million pounds of product to the market, down from 55.8 million on Feb. 19.

The gains were led by buttermilk powder, up 11.0%. GDT Cheddar was up 6.0%, after it led the gains last time with a 2.9% boost. Whole milk powder was also up 6.0% after it inched 0.3% higher last time. Anhydrous milkfat was up 3.9%, following a 0.7% increase, and butter was up 3.7%, after it gained 1.2% in the last event. Lactose rounded up the gains with a 0.6% move higher.

Skim milk powder was down 4.3%, after it gained 2.8% last time, and rennet casein was down 0.1%.

FC Stone equates the GDT 80% butterfat butter price to $2.0609 per pound U.S., up 7.2 cents from the last session. CME butter closed Tuesday at $2.2950.

GDT Cheddar cheese equated to $1.7634 per pound, up a dime from the last event and compares to Tuesday’s CME block Cheddar at $1.57. GDT skim milk powder averaged $1.1165 per pound, down from $1.1702 last time.

Whole milk powder averaged $1.4452, up from $1.3706 last time. CME Grade A nonfat dry milk closed Tuesday at 97 1/2-cents per pound.

Benchmark slips

The Agriculture Department announced the February Federal order Class III benchmark milk price at $13.89 per hundredweight, down 7 cents from January but 49 cents above February 2018 and the first month that The Class III price topped the previous year’s price since November 2017. It equates to $1.19 per gallon, down from $1.20 in January and compares to $1.15 a year ago.

Monday’s Class III futures settlements portend a March price at $15.13; April, $15.00; May, $15.15; and June at $15.46, with a peak at $16.34 in September.

The February Class IV price is $15.86, up 38 cents from January, $2.99 above a year ago, and the highest Class IV price since August 2017.

Culling jumps

The Agriculture Department continues to play catch up with its delayed reports due to the government shutdown. The latest is the Livestock Slaughter report. December data, issued Feb. 27, showed an estimated 261,200 head were slaughtered under federal inspection, down 6,800 head from November but 13,900 head or 5.6% above a year ago. A total 3.15 million head were culled from the nation’s dairy herd in the year, up 164,600 head or 5.5% from 2017.

Meanwhile, the January 2019 slaughter report issued Monday shows dairy culling took a jump in January from December and was up from January 2018.

An estimated 298,400 head found their way to McDonalds and Burger King in January, up 37,200 head from December 14.2%, indicative of the tough times on the farm, and up 8,600 head or 3.0% above January 2018.

Cheese output slips

The USDA’s delayed December Dairy Products report pegged December cheese output at 1.09 billion pounds, up 1.0% from November but 1.2% below December 2017, ending 68 consecutive months that cheese output exceeded that of a year ago. Total cheese output for 2018 hit 12.93 billion pounds, up 2.1% from 2017.

Italian cheese totaled 479.4 million pounds, up 3.0% from November and 2.0% above a year ago. Year to date Italian hit 5.5 billion pounds, up 2.8% from 2017. Mozzarella, at 378.7 million pounds, was up 3.7% from a year ago, with output for the year at 4.3 billion pounds, up 4.1%.

American type cheese totaled 424.6 million pounds, up 0.6% from November but 4.4% below a year ago, with the year’s total at 5.2 billion pounds, up 1.7% from 2017.

Cheddar cheese, the kind traded at the CME, totaled 306.3 million pounds, up 4.5 million pounds from November but 20.8 million or 6.3% below a year ago. Output for 2018 totaled 3.7 billion pounds, virtually unchanged from 2017.

U.S. churns produced 171 million pounds of butter, up 25 million pounds or 17.0% from November but 0.1% below a year ago. Total butter output for 2018 was at 1.88 billion pounds, up 2.0% from 2017.

Dry whey totaled 74.5 million pounds, down 13.4%, with YTD at 1.0 billion pounds, down 2.8%. Dry whey for human consumption totaled 73.2 million pounds, up 0.2% from November but 13.3% below a year ago. Stocks totaled 65.1 million pounds, up 1.0% from November but 32.9% below those a year ago.

Nonfat dry milk production totaled 142.6 million pounds, up 8.3% from November but 13.3% below a year ago. YTD output hit 1.7 billion pounds, down 5.0%. Stocks slipped to 275.3 million pounds, down 14.2 million pounds or 4.9% from November but 44.7 million pounds or 14% below the 2017 levels.

Skim milk powder totaled 50.8 million pounds, up 69.9% from November and 1.8% above a year ago. Skim milk powder output totaled 544.0 million pounds in 2018, up 2.7% from 2017.

Columnist Lee Mielke wraps up the week’s dairy industry news.

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